Lawton Alternative a K-8th grade school, on Sturday Sept. 15, 2012, in San Francisco, Calif., has a solar panel installed on the playground area. Stickers on the edge of the panel reads, Pacific, Gas and Electric, The foundation for Environmental Education and Solar City. After eight years, San Francisco is on the threshold of taking a major step into the public power realm. The Board of Supervisors is set to consider legislation Tuesday (Sept. 18) that will allocate $19.5 million to secure a contract with Shell Energy North America to provide 100 percent renewable power to San Franciscans who want to pay a premium for it, with $2 million of that total allocated to studying local power generation options. The program, CleanPowerSF, is designed to build a customer base and revenue stream to lay the groundwork for city-owned renewable power generation while advancing San Francisco's aggressive greenhouse gas reduction goals.

San Francisco's plans for creating a renewable power program, nine years in the making, are in jeopardy after the city's Public Utilities Commission voted against setting rates for CleanPowerSF on Tuesday.

CleanPowerSF was approved last fall when the Board of Supervisors authorized a five-year, $19.5 million contract with Shell Energy North America, with the goal of creating a customer base to build city-owned renewable power facilities. The program was supposed to automatically enroll half of the city's 375,000 residential customers who get their power from Pacific Gas and Electric Co. in CleanPowerSF. The customers would have to pay more for greener energy unless they opted out.

But by a 3-2 vote that followed months of delays, the commission said it was not prepared to determine how much the program should cost San Franciscans because of continued opposition from labor groups and few details about how a future city-owned power program would be implemented.

"The program we have now is not the program that the commission wants," said PUC spokesman Tyrone Jue, who said a contract with Shell can't be signed until not-to-exceed rates are set. "There is nothing to move forward with."

Supervisor John Avalos said the PUC has created a "constitutional crisis" by not moving to adopt rates. He is considering introducing a Charter amendment that would allow the Board of Supervisors, which supported CleanPowerSF by an 8-3 veto-proof majority, to set not-to-exceed rates if the PUC fails to do so after a certain amount of time.

"It's the whole political establishment coming down against public power," Avalos said. "The invisible hand of PG&E most likely has been involved throughout the effort to delay."

Under the proposal before the city's PUC, CleanPowerSF would cost most residents an average of $5.30 more per month, which is about the cost of a proposed competing green energy option from PG&E that is awaiting state approval. A prior proposal considered by PUC staff would have cost about double the PG&E rate for CleanPowerSF.

"We have before us a sweet spot rate that will allow us to meet our city and state policy objectives, move the program forward and resolve any outstanding questions," said PUC Commissioner Francesca Vietor, who voted in favor of CleanPowerSF, along with Commissioner Anson Moran. "We need to act now."

He noted that PUC staff have made CleanPowerSF more dependent on controversial Renewable Energy Credits, which are tradeable certificates showing energy was generated renewably and cheaper than generating clean power directly.

"At the end of the day, this is not what San Francisco residents anticipated," Torres said. "There are alternatives out there that we need to be looking at."

The vote was devastating to environmental groups that rallied earlier on the steps of City Hall, urging San Francisco to be an example to other cities by adopting CleanPowerSF.

"I feel disappointed in the PUC; they didn't uphold their responsibility to work toward implementing this program," said Jess Dervin-Ackerman, conservation organizer with the San Francisco Bay chapter of the Sierra Club.